Annual Report 2016

1 Annual Report 2016 Strategic Report What we doContents Strategic ReportA transformational year for BBA Aviation 01 Financial Highlights 02 Chairman s Statement 03Q&A with Group Chief Executive 04 Our Enlarged Operations 08 Our Markets 10 Business Model 12 Strategy 14 Measuring Success 15 Flight Support Signature Flight Support 16 Aftermarket Services Ontic 18 Engine Repair & Overhaul (ER0)

2 20 Managing Our Risks 22 Corporate Responsibility 26 Our Markets in 2016 30 Group Finance Director s Review 31 Financial Matters 34 Flight Support 2016 performance 37 Signature Flight Support 2016 performance 38 Aftermarket Services 2016 performance 39 Ontic 2016 performance 40 Engine Repair & Overhaul 2016 performance 41 Directors ReportCorporate Governance Statement 42 Board of Directors and Executive Management 44 Directors Remuneration Report 56 Going Concern and Viability Statement 79 Additional Disclosures 80 Directors Responsibilities 82 Consolidated Financial StatementsIndependent Auditor s Report 83 Consolidated Income Statement 89 Consolidated Statement of Comprehensive Income 90 Consolidated Balance Sheet 91 Consolidated Cash Flow Statement 92 Consolidated Statement of Changes in Equity 93 Accounting Policies of the Group 94 Notes to the Consolidated Financial Statements 101 Company Balance Sheet 150 Company Statement of Changes in Equity 151 Accounting Policies of the Company 152 Notes to the Company Financial Statements 154 Subsidiaries and Related Undertakings 161 Five Year Summary 168 Alternative performance

3 Measures 169 Shareholder Information 174 BBA Aviation plc is a market-leading, global aviation support and aftermarket services provider, primarily focused on servicing the Business and General Aviation (B&GA) market. We support our customers through three principal businesses:Flight Support Signature Flight Supportis the world s largest fixed base operation (FBO) network for B&GA users with more than 200 locations covering key destinations in North America, Europe, Caribbean, Africa and Services Ontic is a leading provider of high-quality equipment and cost-effective solutions for the continuing support of maturing and legacy aerospace platforms with locations in the USA, Europe and Asia.

4 Engine Repair & Overhaul (ERO)is a leading independent engine service provider to global B&GA operators, the rotorcraft market and regional airline fleets with locations in the USA, Europe, South America, Asia and the Middle Vision, Mission & ValuesBBA Aviation is a values-focused organisation, dedicated to being the world s leading provider of aviation support and aftermarket services with the overarching objective to deliver exceptional, long-term, sustainable value for all our businesses are individually and collectively focused on: Consistently exceeding customer expectations; Valuing and empowering our people in a zero incident, safe environment; Encouraging innovation; Working together for greater gain; Always behaving with integrity and Values performance , Safety, People, Service, Responsibility, Integrity align us in what we focus on and how we act and behave every Aviation enabling flight.

5 Expanding horizons Flight Support 67% Aftermarket Services 33% Signature 67% Engine Repair & Overhaul 25% Ontic 8% B&GA 88% Commercial 7% Military 5% North America 86% Rest of World 14%1 Strategic Report A transformational year for BBA AviationA transformational year for BBA AviationDuring the year we have: Materially expanded the size of Signature and created a unique global network of FBO locations The acquisition of Landmark Aviation, additional expansion in the USA and Europe, and the continuing growth of the Signature SelectTM affiliate programme has significantly increased our already market-leading footprint at key destinations for B&GA travel.

6 We have created a unique and high-quality global network of FBO locations, with an unrivalled ability to satisfy the needs of our customers at many more of the locations that they want to fly to. Focused the Group on higher value-added, better IP-protected, strong ROIC and cash generative businessesIn September, we announced the sale of ASIG, which completed on 31 January 2017. Coupled with the growth of Signature, this has significantly increased our focus on providing value-added services to the attractive and growing B&GA market where we are a market leader. We have also continued to invest to grow Ontic s IP-protected portfolio of products, most recently through the GE Avionics acquisition.

7 As a result, we have enhanced our focus on areas which are highly cash generative and where we see the potential to generate enhanced returns on capital on a through-cycle integrated Landmark Aviation and delivered faster than anticipated cost synergiesThe Landmark Aviation acquisition brought 62 FBOs and nearly 3,000 new employees to BBA Aviation. Business performance has met all of our expectations and the detailed and complex integration plan was executed effectively. Synergies have been delivered ahead of schedule and we anticipate annualised cost savings of $39 million f r o m 2 017.

8 2016 Revenue SplitsFigures are reported on a continuing operations basis unless otherwise stated. $2, , up 25%$ operating profit, up 67% , down 90bps>220 Locations5 Continents>6,500 Employees22016 Financial HighlightsStrategic Report Financial Highlights$m2016 22016 continuing20152015 continuingChangeChange continuingRevenue12, , ,129. 81,714 . revenue growth1(2%)(2%)2%2% Underlying EBITDA1414 . % operating profit . 5 %47. 4 %Underlying operating .1% Underlying profit before tax1266 . (Loss)/Profit before tax(164 .6)( ) 7. 4(273%)(206)%(Loss)/Profit for the period( )(19.)

9 3) (219%)(128)%Exceptional and other items including tax1(316 . 0)( )(61. 2)( )(416%)(269%)Earnings per ordinary share basicAdjusted121 .1 2 0 .1 Unadjusted ( )( )11. 6 Earnings per ordinary share 17. 9 Unadjusted ( )( )11. 5 Dividends per ordinary 4 Return on invested capital110 .1% 11. 0 % Operating cash 119. 4 151% Cash conversion 1155% 92% Free cash 154% Net debt1(1, 335. 3) Net debt to underlying 1 Defined and reconciled to reported financials under alternative performance measures (APMs). See pages 169 to From continuing and discontinued Historical net debt is no longer used as an alternative performance measure.

10 The reason it was used in 2015 was because there was a timing difference between the raising of capital in 2015 and the issue of debt in 2016 for the Landmark Dividend per share is disclosed as historically reported. Adjusted for the new capital base, the restated dividend per share is .3 Strategic Report Chairman s StatementChairman s StatementBBA Aviation delivered a strong overall performance in 2016 and has made excellent strategic progress. With the completion of the acquisition of Landmark Aviation, the sale at the beginning of 2017 of ASIG and continued investment in Ontic s portfolio, the Group has transformed and is positioned strongly for the Flight Support we saw excellent organic underlying operating profit progression of 7% despite modest market growth.